The stock should rise to $ 450 per share, but possibly after falling to as low as $ 230, given the bearish sentiment ahead of the impending competition, warns Todd Juenger.
Netflix investors, accustomed to big gains, have seen the stock fall 20 percent since the streamer revealed on July 1
But the analyst also said that Netflix shares should rebound sharply, to a 50 percent gain from where they traded today – which was down 2 percent to $ 286.60 while Juenger has a target price of $ 450 a year.
The disconnect, the analyst says, is in the opinion that Disney +, which is set to launch November 12 for $ 7 a month, and Apple TV +, which is set to debut November 1 for $ 5 a month , will harm Netflix's business. This analysis may sound reasonable in the short term, but when the pressure comes to shove, not too many of the consumers who sign up for competing services will ditch Netflix when they do.
Juenger also claimed in a research note on Thursday that losing popular performances such as Friends in 2020 and The Office in 2021 won't hurt Netflix, much like losing Starz and those Most of Fox didn't hurt the streamer very much in the years before. The library content can be easily exchanged, and in fact Netflix has already done so by announcing all 180 episodes of the iconic Seinfeld will be on the platform globally as of 2021 in a deal valued north of $ 500 million.  Netflix saves a bundle by not renewing Friends The Office or a bunch of Disney content that the latter will now save for Disney +, thus giving Netflix the funds it needed Seinfeld and for more original content, Juenger argues.
"The belief that new services will take market share from Netflix rests on the assumption that the services will compete with each other for a fixed number of potential subscribers. We don't think that's true," said the analyst. SVOD services will cause existing Netflix subscribers to cancel or future Netflix subscribers not be realized. "
In fact, Juenger claims, the upcoming streamers" will accelerate consumer migration from linear TV to SVOD, "a position taken by other analysts, and many of them predict that there is more pain to traditional broadcasting and cable TV channels than what is ahead of Netflix.
Netflix is concerned about subscriber growth, loss of content and price power, given that streamer charges almost double what Disney + will cost, but Juenger says the latter is the most compelling case, and even there the Bears are wrong.
"Netflix has a more expensive list price ice cream than Disney + or Apple (or Amazon). We think that makes sense, given the much larger amount of content (and) frequency of new content on Netflix, "the analyst writes.
So even as Juenger warns that Netflix can drop to $ 230 per share, he remains confidant to it will rise to $ 450 over the next 12 months, which is why he repeated his "out-of-competition" rating on the stock.